Moscow, April 09, 2015

EDC Reports 2014 Full year results

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News Release

 

EDC Reports 2014 Full Year Results

 

MOSCOW, April 9, 2015 -Eurasia Drilling Company Limited ("EDC" or the "Company" - LSE: EDCL), the leading onshore & offshore drilling service provider in the CIS, today announced its consolidated financial results for the year ended December 31, 2014, prepared in accordance with US GAAP.

The audited Consolidated Financial Statements for the twelve months ended December 31, 2014, and Management's Report on 2014 Results, can be found under the link:  /financial_information.html

 

2014 FINANCIAL HIGHLIGHTS:

  • Top line revenue was US $2,975 million, 14.5% below revenue for the year ended December 31, 2013, in the amount of US $3,478 million;
  • Adjusted EBITDA was US $834 million, 11.3% below adjusted EBITDA for the year ended December 31, 2013, in the amount of US $940 million;
  • Adjusted EBITDA margin increased to a record 28.0% compared to 27.0% for 2013;
  • Net income was US $421 million, 2.5% below net income for the year ended December 31, 2013 in the amount of US $432 million;
  • Net income margin increased to 14.1% compared to net income margin of 12.4% for 2013;
  • Capital expenditure was US $530 million (2013: US $508 million);
  • Dividends declared and paid for the year ended December 31, 2014 were $1.0 per share (2013: $0.92 per share);
  • Cash flow from operations amounted to US $641 million (2013: US $751 million);
  • The average exchange rate for 2014 was 38.4 Rubles per US Dollar (2013: 31.8 Rubles per US Dollar).

  Taleh Aleskerov, EDC's Chief Financial Officer, commented:

"We've reported another strong set of results despite the challenging market environment, high geopolitical tensions, declining oil prices and the weakening Ruble. Our revenues, adjusted EBITDA and net income in US Dollar terms declined mostly because of Ruble devaluation. In spite of these challenges, our adjusted EBITDA margin and net income margin grew to new record highs as a result of all the actions we've taken to improve the efficiency of our business. Despite increased leverage, which was also due to the Ruble devaluation, we continue to have a strong balance sheet and are positioned well to meet further head winds from the low oil price."

 

2014 OPERATIONAL HIGHLIGHTS:

  • Drilled 5.669 million metres, a 9.5% decrease compared to the corresponding period of 2013 with 6.264 million metres drilled;
  • Share of horizontal metres drilled out of total metres drilled increased to 23% during 2014 compared to 21% during the same period of 2013;
  • The share of our largest customer, LUKOIL, increased to 63% of our total metres drilled during 2014, compared to 57% during 2013;
  • The share of our second largest customer, GAZPROMNEFT, increased to 22% of our total metres drilled during 2014, compared to 12% during 2013;
  • The share of ROSNEFT decreased to 7% of our total metres drilled during 2014, compared to 24% during 2013;
  • Market share was approximately 27% based on metres drilled onshore in Russia during 2014;
  • Signed a long-term agreement with GAZPROMNEFT for well construction and sidetracking services for a three year period;
  • Signed a Framework Agreement with BENTEC for rig manufacturing by the Company's minority owned drilling rig production facility located in Kaliningrad;
  • Our ASTRA jack-up rig was on paid stand-by in ice free waters for most of the first quarter 2014, before completing two exploration  wells for LUKOIL and one exploration well for KNK in the Russian and Kazakh sectors of the Caspian Sea, respectively;
  • Our SATURN jack-up rig continued its operations for PETRONAS Carigali (Turkmenistan) Sdn Bhd (Petronas) in the Turkmen waters of the Caspian Sea; four geological sidetracks were performed;
  • Drilled and completed three wells on LUKOIL's Yuri Korchagin field platform in the Caspian Sea, including two extended-reach horizontal development wells and commenced drilling another extended-reach horizontal development well;
  • The new-build NEPTUNE jack-up rig commenced drilling for Dragon Oil in Turkmen waters of the Caspian Sea; four wells were drilled and completed;
  • Our fourth new-build jack-up, MERCURY, was completed with all required equipment and was being commissioning at year end.

 

Dr. Alexander Djaparidze, EDC's Chief Executive Officer, added:

"We've had another successful year at EDC and I'm very pleased to report that we've managed to deliver again on our financial and operational targets.  Both our onshore and offshore business execution has been excellent and I'd like to thank all our employees for their hard work. The year 2014 was our tenth anniversary as an independent drilling company and was marked by significant changes in the market, while our team performed strongly by consistently focusing on our operational capabilities and improvements in efficiency. We are well positioned to continue to provide superior services and respond to our customers' needs, which is now even more important in the challenging low oil price environment."

 

To view the complete release, please click here.

Next: 30 April 2015: Second Extension of Merger Long Stop Date